##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C. 20549
  Form 10-Q
  þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES AND EXCHANGE ACT OF 1934For the quarterly period ended
    August 31, 2006oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          
    to    Commission file number 0-19603
  CENTENNIAL  COMMUNICATIONS
    CORP.
 (Exact name of registrant as
    specified in its charter)
   Delaware

06-1242753(State or other jurisdiction
    of
    incorporation or organization)

(IRS Employer
    Identification No.)   3349 Route 138
    Wall, NJ 07719 (Address of principal
    executive offices,
    including zip code)
  (732) 556-2200 (Registrants telephone
    number,
    including area code)
   þ o
  Rule 12b-2 o þ o
  Rule 12b-2 o þ




---



##### 



TABLE OF
    CONTENTS
  
  Part I 
    Financial InformationItem 1.

Financial
    Statements


2Item 2.

Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


24Item 3.

Quantitative and
    Qualitative Disclosures about Market Risk


39Item 4.

Controls and
    Procedures


40Part II 
    Other InformationItem 1.

Legal
    Proceedings


41Item 1A.

Risk
    Factors


41Item 2.

Unregistered Sales
    of Equity Securities and Use of Proceeds


41Item 3.

Defaults Upon
    Senior Securities


41Item 4.

Submission of
    Matters to a Vote of Security Holders


41Item 5.

Other
    Information


41Item 6.

Exhibits


42EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION   1




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##### Table of Contents



PART I 
    FINANCIAL INFORMATION  ITEM 1.
    FINANCIAL
    STATEMENTS  CENTENNIAL
    COMMUNICATIONS CORP. AND SUBSIDIARIES
  CONDENSED
    CONSOLIDATED BALANCE SHEETS
 (Dollar
    amounts in thousands, except share data)
  August 31,


May 31,2006


2006(Unaudited)ASSETSCURRENT ASSETS:Cash and cash equivalents

$
84,631


$
94,884Accounts receivable, less allowance
    for doubtful accounts of $8,057 and $7,942, respectively


108,336



101,007Inventory  phones and
    accessories, net


25,814



20,799Prepaid expenses and other current
    assets


32,085



30,040Total Current Assets


250,866



246,730Property, plant and equipment, net


632,548



644,059Equity investments in wireless
    systems, net


1,990



1,952Debt issuance costs, less
    accumulated amortization of $23,774 and $21,618, respectively


49,682



51,812U.S. wireless licenses


383,858



383,858Caribbean wireless licenses, net


68,242



68,492Goodwill


30,204



26,704Transmission and connecting rights,
    net


643



665Cable facility, net


3,670



3,730Other assets, net


11,794



7,891TOTAL ASSETS

$
1,433,497


$
1,435,893LIABILITIES AND
    STOCKHOLDERS DEFICITCURRENT LIABILITIES:Current portion of long-term debt

$



$
Accounts payable


34,394



29,097Accrued expenses and other current
    liabilities


183,584



194,425Payable to affiliates


125



125Total Current Liabilities


218,103



223,647Long-term debt


2,137,863



2,135,053Deferred income taxes


123,138



122,952Other liabilities


16,108



15,870Minority interest in subsidiaries


3,439



3,230Commitments and contingencies (see
    Note 8)STOCKHOLDERS DEFICIT:Preferred stock, $0.01 par
    value per share, 10,000,000 shares authorized, no shares
    issued or outstanding






Common stock, $0.01 par value
    per share, 240,000,000 shares authorized; issued
    105,412,522 and 105,224,491 shares, respectively; and
    outstanding 105,342,019 and 105,153,988 shares, respectively


1,054



1,052Additional paid-in capital


6,986



4,211Accumulated deficit


(1,073,922
)


(1,071,760
)Accumulated other comprehensive
    income


1,805



2,715(1,064,077
)


(1,063,782
)Less: cost of 70,503 common shares
    in treasury


(1,077
)


(1,077
)Total Stockholders Deficit


(1,065,154
)


(1,064,859
)TOTAL LIABILITIES AND
    STOCKHOLDERS DEFICIT

$
1,433,497


$
1,435,893    2




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##### Table of Contents



CENTENNIAL
    COMMUNICATIONS CORP. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (Unaudited)
    (Dollar amounts in thousands, except per share data)
  Three Months EndedAugust 31,


August 31,2006


2005Revenue:Service revenue

$
230,225


$
228,223Equipment sales


12,746



9,020242,971



237,243Costs and Expenses:Cost of services (exclusive of
    depreciation and amortization shown below)


51,713



49,180Cost of equipment sold


30,050



25,182Sales and marketing


25,791



25,550General and administrative


43,273



43,148Depreciation and amortization


35,817



32,751Loss (gain) on disposition of assets


205



(85
)186,849



175,726Operating income


56,122



61,517Interest expense, net


(50,714
)


(33,995
)Other income (expense)


7



(6
)Income from continuing operations
    before income tax expense, minority interest in income of
    subsidiaries and income from equity investments


5,415



27,516Income tax expense


(7,622
)


(12,802
)(Loss) income from continuing
    operations before minority interest in income of subsidiaries
    and income from equity investments


(2,207
)


14,714Minority interest in income of
    subsidiaries


(208
)


(212
)Income from equity investments


253



108(Loss) income from continuing
    operations


(2,162
)


14,610Discontinued operations:Income






Gain on disposition






100Tax expense






(35
)Net income from discontinued
    operations






65Net (loss) income

$
(2,162
)

$
14,675(Loss) earnings per share:Basic(Loss) earnings per share from
    continuing operations

$
(0.02
)

$
0.14Earnings per share from
    discontinued operations






0.00Net (loss) income per share

$
(0.02
)

$
0.14Diluted(Loss) earnings per share from
    continuing operations

$
(0.02
)

$
0.14Earnings per share from
    discontinued operations






0.00Net (loss) income per share

$
(0.02
)

$
0.14Weighted-average number of shares
    outstanding:Basic


105,211



104,108Diluted


105,211



106,876    3




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##### Table of Contents



CENTENNIAL
    COMMUNICATIONS CORP. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited)
    (Dollar amounts in thousands)
  Three Months EndedAugust 31,


August 31,2006


2005OPERATING ACTIVITIES:Net (loss) income

$
(2,162
)

$
14,675Adjustments to reconcile net
    income to net cash provided by operating activities:Depreciation and amortization


35,817



32,751Stock-based compensation


2,106



Excess tax benefits from
    stock-based compensation


(43
)


Minority interest in income of
    subsidiaries


208



212Income from equity investments


(253
)


(108
)Distributions received from equity
    investments


215



Loss (gain) on disposition of
    assets


205



185Changes in assets and liabilities


(27,578
)


(15,319
)Net cash provided by operating
    activities


8,515



32,396INVESTING ACTIVITIES:Proceeds from disposition of
    assets, net of cash expenses


316



5Acquisition of minority interest,
    net


(2,500
)


Capital expenditures


(16,862
)


(26,665
)Net cash used in investing
    activities


(19,046
)


(26,660
)FINANCING ACTIVITIES:Repayment of debt


(436
)


(1,616
)Proceeds from the exercise of
    stock options


210



853Excess tax benefits from
    stock-based compensation


43



Proceeds from issuance of common
    stock under employee stock purchase plan


461



384Net cash provided by (used in)
    financing activities


278



(379
)Net (decrease) increase in cash
    and cash equivalents


(10,253
)


5,357Cash and cash equivalents,
    beginning of period


94,884



132,820Cash and cash equivalents, end of
    period

$
84,631


$
138,177SUPPLEMENTAL CASH FLOW DISCLOSURE:Cash paid during the period for:Interest

$
67,698


$
56,661Income taxes

$
740


$
1,561NON-CASH TRANSACTION:Fixed assets acquired under
    capital leases

$
2,536


$
714Acquisition of minority interest
    included in accrued expenses and other current liabilities

$
1,000


$
    4




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)
    (Dollar amounts in thousands, except per share
    amounts)
  NOTE 1.
    INTERIM
    FINANCIAL STATEMENTS  Form 10-K,
  Income
    Taxes:
  Accounting for Income Taxes Interim Financial
    Reporting Accounting for Income Taxes in Interim
    Periods  An Interpretation of APB Opinion
    No. 28
      NOTE 2.
    OTHER
    INTANGIBLE ASSETS AND GOODWILL  Other
    Intangible Assets
    As of


As ofAugust 31, 2006


May 31, 2006U.S. wireless licenses

$
383,858


$
383,858Caribbean wireless
    licenses  Puerto Rico(1)


54,159



54,159Total

$
438,017


$
438,017     (1)
    
    Included in Caribbean wireless licenses on the consolidated
    balance sheet which also includes finite lived wireless assets
    for the Dominican Republic (see table below). 5




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Goodwill and Other
    Intangible Assets
  Disclosures
    about Segments of an Enterprise and Related Information
  Use of the Residual Method to Value Acquired Assets
    other than Goodwill. Business Combinations
   6




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     As of August 31, 2006


As of May 31, 2006Estimated


Gross





GrossUseful


Carrying


Accumulated


Carrying


AccumulatedLife


Amount


Amortization


Amount


AmortizationCaribbean wireless
    licenses  Dominican Republic


20 years


$
20,000


$
5,917


$
20,000


$
5,667Transmission and connecting rights


25 years



2,192



1,549



2,192



1,527Cable facility


25 years



6,000



2,330



6,000



2,270Total





$
28,192


$
9,796


$
28,192


$
9,464     Goodwill
    NOTE 3.
    DEBT    As of


As ofAugust 31, 2006


May 31, 2006Senior Secured Credit
    Facility  Term Loans

$
550,000


$
550,00081/8% Senior
    Unsecured Notes due 2014


325,000



325,000101/8% Senior
    Unsecured Notes due 2013


500,000



500,000Senior Unsecured Holdco Floating
    Rate Notes due 2013, net of unamortized discount of $3,155


346,845



346,72010% Senior Unsecured Holdco
    Fixed Rate Notes due 2013


200,000



200,000103/4% Senior
    Subordinated Notes due 2008


145,000



145,000Capital Lease Obligations


58,505



55,730Financing Obligation 
    Tower Sale


12,513



12,603Total Long-Term Debt


2,137,863



2,135,053Current Portion of Long-Term Debt






Net Long-Term Debt

$
2,137,863


$
2,135,053   Senior
    Secured Credit Facility
   7




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   3 4
    High-Yield
    Notes
    1 8
  1 8
    Derivative
    Financial Instruments
   8




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
             August 31, 2007

$
August 31, 2008


(556
)August 31, 2009


145,019August 31, 2010


275,157August 31, 2011


275,263August 31, 2012 and thereafter


1,446,1352,141,018Unamortized discount


(3,155
)$
2,137,863     NOTE 4.
    EMPLOYEE
    STOCK COMPENSATION  Share-Based Payment
   9




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Accounting for Stock-Based
    Compensation
      Accounting for Stock-Based
    Compensation  Transition and Disclosures.
    Three Months EndedAugust 31, 2005Net income (loss):As reported

$
14,675Deduct: total stock based employee
    compensation determined under fair-value based method for all
    awards, net of related tax effects


1,494Pro forma

$
13,181Earnings per share:Basic:As reported

$
0.14Pro forma

$
0.13Diluted:As reported

$
0.14Pro forma

$
0.12  10




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Assumptions:
    Three Months EndedAugust 31,2006


2005Expected volatility


69.5%



77.9%Risk-free interest rate


4.8%



4.3%Expected lives of option grants


4.5 years



4 yearsExpected dividend yield


0.00%



0.00%     catch-up
  1999
    Stock Option Plan:
     11




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Weighted AverageWeighted Average


Remaining Contractual


AggregateShares


Exercise Price


Term (In years)


Intrinsic ValueOutstanding at June 1, 2006


10,863


$
4.97Granted


39


$
5.21Exercised


(85
)

$
3.07Forfeited/cancelled


(49
)

$
6.26Outstanding at August 31, 2006


10,768


$
4.98



5.48


$
1.22Options exercisable at
    August 31, 2006


5,870


$
3.95



4.86


$
0.67         Weighted AverageShares


Grant-Date Fair ValueNonvested at June 1, 2006


6,126


$
3.65Granted


39


$
3.06Vested


(1,239
)

$
2.57Forfeited


(28
)

$
4.05Nonvested at August 31, 2006


4,898


$
3.88     NOTE 5.
    DISCONTINUED
    OPERATIONS  Accounting for the Impairment or
    Disposal of Long-Lived Assets
 12




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   NOTE 6.
    RECENT
    ACCOUNTING PRONOUNCEMENTS  Fair Value
    Measurement.
  Accounting for Uncertainty in Income Taxes  an
    interpretation of FASB Statement No. 109
  Accounting Changes and Error Corrections  a
    Replacement of APB Opinion No. 20 and FASB Statement
    No. 3
  NOTE 7.
    ACQUISITIONS
    AND DISPOSITIONS      NOTE 8.
    COMMITMENTS
    AND CONTINGENCIES  Legal
    Proceedings:
   13




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         Guarantees:
    Lease
    Commitments:
    Other
    Commitments and Contingencies:
     14




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      NOTE 9.
    SEGMENT
    INFORMATION     15




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Three Months EndedAugust 31,2006


2005U.S. WIRELESSService revenue

$
91,709


$
80,903Roaming revenue


19,322



21,225Equipment sales


9,390



5,698Total revenue


120,421



107,826Adjusted operating income


43,691



40,653Total assets


1,904,084



1,862,715Capital expenditures


5,403



9,551CARIBBEAN WIRELESSService revenue

$
86,281


$
92,132Roaming revenue


1,641



346Equipment sales


3,356



3,322Total revenue


91,278



95,800Adjusted operating income


33,631



36,833Total assets


386,158



496,514Capital expenditures


7,354



10,307CARIBBEAN BROADBANDSwitched revenue

$
13,940


$
12,715Dedicated revenue


15,275



14,282Wholesale termination revenue


3,649



6,576Other revenue


2,267



3,096Total revenue


35,131



36,669Adjusted operating income


17,211



16,697Total assets


727,278



695,415Capital expenditures


4,105



6,807ELIMINATIONSTotal revenue(1)

$
(3,859
)

$
(3,052
)Total assets(2)


(1,584,023
)


(1,598,341
)CONSOLIDATEDTotal revenue

$
242,971


$
237,243Adjusted operating income


94,533



94,183Total assets


1,433,497



1,456,303Capital expenditures


16,862



26,665     (1)
    
    Elimination of intercompany revenue, primarily from Caribbean
    broadband to Caribbean wireless.(2)
    
    Elimination of intercompany investments. 16




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Three Months EndedAugust 31,2006


2005Adjusted operating income

$
94,533


$
94,183Depreciation and amortization


(35,817
)


(32,751
)Stock-based compensation expense


(2,106
)


Strategic
    alternatives/recapitalization costs


(283
)


(Loss) gain on disposition of
    assets


(205
)


85Operating income


56,122



61,517Interest expense, net


(50,714
)


(33,995
)Other income (expense)


7



(6
)Income tax expense


(7,622
)


(12,802
)Minority interest in income of
    subsidiaries


(208
)


(212
)Income from equity investments


253



108Income from discontinued operations






65Net (loss) income

$
(2,162
)

$
14,675   NOTE 10.
    CONDENSED
    CONSOLIDATING FINANCIAL DATA   17




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   CONDENSED
    CONSOLIDATING BALANCE SHEET FINANCIAL DATA
    As of August 31, 2006
  Centennial


Centennial











CentennialPuerto Rico


Cellular





Centennial





CommunicationsOperations


Operating


Non-


Communications





Corp. andCorp.


Co. LLC


Guarantors


Corp.


Eliminations


Subsidiaries(Amounts in thousands)ASSETSCurrent assets:Cash and cash equivalents

$
35,416


$



$
49,215


$



$



$
84,631Accounts receivable, net


43,814







64,522











108,336Inventory  phones and
    accessories, net


9,072







16,742











25,814Prepaid expenses and other current
    assets


7,331







24,754











32,085Total current assets


95,633







155,233











250,866Property, plant &
    equipment, net


244,903







387,645











632,548Equity investments in wireless
    systems, net










1,990











1,990Debt issuance costs


17,108







32,574











49,682U.S. wireless licenses










383,858











383,858Caribbean wireless licenses, net










68,242











68,242Goodwill


4,186







26,018











30,204Investment in subsidiaries






963,941



638,461



(733,698
)


(868,704
)


Other assets, net


8,270







7,837











16,107Total

$
370,100


$
963,941


$
1,701,858


$
(733,698
)

$
(868,704
)

$
1,433,497LIABILITIES AND
    STOCKHOLDERS (DEFICIT) EQUITYCurrent liabilities:Current portion of long-term debt

$



$



$



$



$



$
Accounts payable


12,238







22,156











34,394Accrued expenses and other current
    liabilities


51,764







397,717







(265,897
)


183,584Payable to affiliates










125











125Total current liabilities


64,002







419,998







(265,897
)


218,103Long-term debt


792,090



736,395



62,533



546,845







2,137,863Deferred federal income taxes


6,311







116,827











123,138Other liabilities


4,721







11,387











16,108Intercompany


33,363



941,454



977,088



(213,584
)


(1,738,321
)


Minority interest in subsidiaries










3,439











3,439Redeemable preferred stock


560,038















(560,038
)


Stockholders (deficit) equity:Common stock














1,054







1,054Additional paid-in capital


(818,497
)






818,497



6,986







6,986Accumulated (deficit) equity


(273,003
)


(714,638
)


(707,911
)


(1,073,922
)


1,695,552



(1,073,922
)Accumulated other comprehensive
    income


1,075



730















1,805(1,090,425
)


(713,908
)


110,586



(1,065,882
)


1,695,552



(1,064,077
)Less: treasury shares














(1,077
)






(1,077
)Total stockholders (deficit)
    equity


(1,090,425
)


(713,908
)


110,586



(1,066,959
)


1,695,552



(1,065,154
)Total

$
370,100


$
963,941


$
1,701,858


$
(733,698
)

$
(868,704
)

$
1,433,497  18




---



##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   CONDENSED
    CONSOLIDATING STATEMENT OF OPERATIONS FINANCIAL DATA
    For the Three Months Ended August 31, 2006
  Centennial


Centennial











CentennialPuerto Rico


Cellular





Centennial





CommunicationsOperations


Operating


Non-


Communications





Corp. andCorp.


Co. LLC


Guarantors


Corp.


Eliminations


Subsidiaries(Amounts in thousands)Revenue

$
99,083


$



$
145,588


$



$
(1,700
)

$
242,971Costs and expenses:Cost of services


17,989







35,041







(1,317
)


51,713Cost of equipment sold


6,474







23,576











30,050Sales and marketing


9,292







16,499











25,791General and administrative


20,868







22,788







(383
)


43,273Depreciation and amortization


16,627







19,190











35,817Loss (gain) on disposition of
    assets


543







(338
)










20571,793







116,756







(1,700
)


186,849Operating income


27,290







28,832











56,122(Loss) income from investments in
    subsidiaries






(2,162
)


(3,110
)


(2,162
)


7,434



Interest expense, net


(25,594
)


(17,294
)


16,263



(14,789
)


(9,300
)


(50,714
)Other (expense) income


(578
)






585











7Intercompany interest allocation






17,294



(41,383
)


14,789



9,300



Income (loss) from continuing
    operations before income tax expense, minority interest in
    income of subsidiaries and income from equity investments


1,118



(2,162
)


1,187



(2,162
)


7,434



5,415Income tax expense


(4,228
)






(3,394
)










(7,622
)(Loss) income from continuing
    operations before minority interest in income of subsidiaries
    and income from equity investments


(3,110
)


(2,162
)


(2,207
)


(2,162
)


7,434



(2,207
)Minority interest in income of
    subsidiaries










(208
)










(208
)Income from equity investments










253











253Net (loss) income

$
(3,110
)

$
(2,162
)

$
(2,162
)

$
(2,162
)

$
7,434


$
(2,162
)  19




---



##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   CONDENSED
    CONSOLIDATING STATEMENT OF CASH FLOWS FINANCIAL DATA
    For the Three Months Ended August 31, 2006
  Centennial


Centennial











CentennialPuerto Rico


Cellular





Centennial





CommunicationsOperations


Operating


Non-


Communications





Corp. andCorp.


Co. LLC


Guarantors


Corp.


Eliminations


Subsidiaries(Amounts in thousands)OPERATING ACTIVITIES:Net (loss) income


(3,110
)


(2,162
)


(2,162
)


(2,162
)


7,434



(2,162
)Adjustments to reconcile net (loss)
    income to net cash (used in) provided by operating activities:Depreciation and amortization


16,627







19,190











35,817Stock-based compensation expense


1,024







1,082











2,106Excess tax benefits from
    stock-based compensation










(43
)










(43
)Minority interest in income of
    subsidiaries










208











208Income from equity investments










(253
)










(253
)Equity in undistributed earnings
    (loss) of subsidiaries






(2,162
)


(3,110
)


(2,162
)


7,434



Distribution received from equity
    investment










215











215Loss (gain) on disposition of assets


543







(338
)










205Changes in assets and liabilities,
    net of effects of acquisitions and dispositions and other


(15,747
)


149,386



(81,050
)


(69,279
)


(10,888
)


(27,578
)Total adjustments


2,447



147,224



(64,099
)


(71,441
)


(3,454
)


10,677NET CASH (USED IN) PROVIDED BY
    OPERATING ACTIVITIES


(663
)


145,062



(66,261
)


(73,603
)


3,980



8,515INVESTING ACTIVITIES:Proceeds from disposition of
    assets, net of cash expenses










316











316Acquisition of minority interest,
    net










(2,500
)










(2,500
)Capital expenditures


(9,572
)






(7,290
)










(16,862
)NET CASH USED IN INVESTING
    ACTIVITIES


(9,572
)






(9,474
)










(19,046
)FINANCING ACTIVITIES:Repayment of debt










(436
)










(436
)Proceeds from the exercise of
    employee stock options














210







210Excess tax benefits from
    stock-based compensation










43











43Proceeds from issuance of common
    stock under employee stock purchase plan














461







461Cash received from (paid to)
    affiliates


19,522



(145,062
)


56,588



72,932



(3,980
)


NET CASH PROVIDED BY (USED IN)
    FINANCING ACTIVITIES


19,522



(145,062
)


56,195



73,603



(3,980
)


278NET INCREASE (DECREASE) IN CASH AND
    CASH EQUIVALENTS


9,287







(19,540
)










(10,253
)CASH AND CASH EQUIVALENTS,
    BEGINNING OF PERIOD


26,129







68,755











94,884CASH AND CASH EQUIVALENTS, END OF
    PERIOD


35,416







49,215











84,631  20




---



##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   CONDENSED
    CONSOLIDATING BALANCE SHEET FINANCIAL DATA
    As of May 31, 2006
    (Amounts in thousands)
  Centennial


Centennial











CentennialPuerto Rico


Cellular





Centennial





CommunicationsOperations


Operating


Non-


Communications





Corp. andCorp.


Co. LLC


Guarantors


Corp.


Eliminations


SubsidiariesASSETSCurrent assets:Cash and cash equivalents

$
26,129


$



$
68,755


$



$



$
94,884Accounts receivable, net


41,835







59,172











101,007Inventory  phones and
    accessories, net


9,185







11,614











20,799Prepaid expenses and other current
    assets


7,200







22,840











30,040Total current assets


84,349







162,381











246,730Property, plant &
    equipment, net


248,929







395,130











644,059Equity investments in wireless
    systems, net










1,952











1,952Debt issuance costs


17,798







34,014











51,812U.S. wireless licenses










383,858











383,858Caribbean wireless licenses, net










68,492











68,492Goodwill


4,186







22,518











26,704Investment in subsidiaries






966,103



641,571



(731,536
)


(876,138
)


Other assets, net


9,218







3,068











12,286Total

$
364,480


$
966,103


$
1,712,984


$
(731,536
)

$
(876,138
)

$
1,435,893LIABILITIES AND
    STOCKHOLDERS (DEFICIT) EQUITYCurrent liabilities:Current portion of long-term debt






















Accounts payable


13,584







15,513











29,097Accrued expenses and other current
    liabilities


610,710







395,419







(811,704
)


194,425Payable to affiliates










125











125Total current liabilities


624,294







411,057







(811,704
)


223,647Long-term debt


792,025



736,395



59,913



546,720







2,135,053Deferred federal income taxes


9,294







113,658











122,952Other liabilities


4,809







11,061











15,870Intercompany


11,110



941,171



1,001,317



(210,682
)


(1,742,916
)


Minority Interest in subsidiaries










3,230











3,230Stockholders (deficit) equity:Common stock














1,052







1,052Additional paid-in capital


(818,497
)






818,497



4,211







4,211Accumulated deficit


(260,257
)


(712,476
)


(705,749
)


(1,071,760
)


1,678,482



(1,071,760
)Accumulated other comprehensive loss


1,702



1,013















2,715(1,077,052
)


(711,463
)


112,748



(1,066,497
)


1,678,482



(1,063,782
)Less: treasury shares














(1,077
)






(1,077
)Total stockholders (deficit)
    equity


(1,077,052
)


(711,463
)


112,748



(1,067,574
)


1,678,482



(1,064,859
)Total

$
364,480


$
966,103


$
1,712,984


$
(731,536
)

$
(876,138
)

$
1,435,893  21




---



##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   CONDENSED
    CONSOLIDATING STATEMENT OF OPERATIONS FINANCIAL DATA
    For the Three Months Ended August 31, 2005
    (Amounts in thousands)
  Centennial


Centennial











CentennialPuerto Rico


Cellular





Centennial





CommunicationsOperations


Operating


Non-


Communications





Corp. andCorp.


Co. LLC


Guarantors


Corp.


Eliminations


Subsidiaries(Amounts in thousands)Revenue

$
101,494


$



$
136,975


$



$
(1,226
)

$
237,243Costs and expenses:Cost of services (exclusive of
    depreciation and amortization shown below)


17,270







32,909







(999
)


49,180Cost of equipment sold


5,460







19,722











25,182Sales and marketing


9,422







16,128











25,550General and administrative


22,251







21,124







(227
)


43,148Depreciation and amortization


15,729







17,022











32,751Gain on disposition of assets


(16
)






(69
)










(85
)70,116







106,836







(1,226
)


175,726Operating income


31,378







30,139











61,517Income (loss) from investments in
    subsidiaries






14,675



613



14,675



(29,963
)


Interest expense, net


(26,111
)


(33,995
)


26,111











(33,995
)Other expenses


(467
)






461











(6
)Intercompany interest allocation






33,995



(33,995
)










Income (loss) from continuing
    operations before income tax expense and minority interest


4,800



14,675



23,329



14,675



(29,963
)


27,516Income tax expense


(4,187
)






(8,615
)










(12,802
)Income (loss) from continuing
    operations before minority interest


613



14,675



14,714



14,675



(29,963
)


14,714Minority interest in income of
    subsidiaries










(212
)










(212
)Income from equity investments










108











108Income (loss) from continuing
    operations


613



14,675



14,610



14,675



(29,963
)


14,610Income from discontinued operations










65











65Net income (loss)

$
613


$
14,675


$
14,675


$
14,675


$
(29,963
)

$
14,675  22




---



##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   CONDENSED
    CONSOLIDATING STATEMENT OF CASH FLOWS FINANCIAL DATA
    For the Three Months Ended August 31, 2005
    (Amounts in thousands)
  Centennial


Centennial











CentennialPuerto Rico


Cellular





Centennial





CommunicationsOperations


Operating


Non-


Communications





Corp. andCorp.


Co. LLC


Guarantors


Corp.


Eliminations


Subsidiaries(Amounts in thousands)OPERATING ACTIVITIES:Net income

$
613


$
14,675


$
14,675


$
14,675


$
(29,963
)

$
14,675Adjustments to reconcile net income
    (loss) to net cash provided by (used in) operating activities:Depreciation and amortization


15,729







17,022











32,751Minority interest in loss of
    subsidiaries










212











212Income from equity investments










(108
)










(108
)Equity in undistributed earnings of
    subsidiaries






(14,675
)


(613
)


(14,675
)


29,963



(Loss) gain on disposition of assets


(16
)






201











185Changes in assets and liabilities,
    net of effects of acquisitions and dispositions and other


2,641



(191,086
)


138,384



15,910



18,832



(15,319
)Total adjustments


18,354



(205,761
)


155,098



1,235



48,795



17,721NET CASH PROVIDED BY (USED IN)
    OPERATING ACTIVITIES


18,967



(191,086
)


169,773



15,910



18,832



32,396INVESTING ACTIVITIES:Proceeds from disposition of
    assets, net of cash expenses










5











5Capital expenditures


(15,123
)






(11,542
)










(26,665
)NET CASH USED IN INVESTING
    ACTIVITIES


(15,123
)






(11,537
)










(26,660
)FINANCING ACTIVITIES:Repayment of debt






(1,500
)


(116
)










(1,616
)Proceeds from the exercise of
    employee stock options














853







853Proceeds from issuance of common
    stock under employee stock purchase plan














384







384Cash received (paid to) from
    affiliates


8,758



192,586



(165,365
)


(17,147
)


(18,832
)


NET CASH PROVIDED BY (USED IN)
    FINANCING ACTIVITIES


8,758



191,086



(165,481
)


(15,910
)


(18,832
)


(379
)NET CASH USED IN DISCONTINUED
    OPERATIONS






















NET INCREASE IN CASH AND CASH
    EQUIVALENTS


12,602







(7,245
)










5,357CASH AND CASH EQUIVALENTS,
    BEGINNING OF PERIOD


62,871







69,949











132,820CASH AND CASH EQUIVALENTS, END OF
    PERIOD

$
75,473


$



$
62,704


$



$



$
138,177   NOTE 11.
    SUBSEQUENT
    EVENTS   23




---



##### Table of Contents



ITEM 2.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  EXECUTIVE
    OVERVIEW
  Company
    Overview
      Form 10-K Form 10-Q. Form 10-K.
  Managements
    Summary
         24




---



##### Table of Contents



Three Months Ended


% of Total CapitalAugust 31, 2006


ExpendituresU.S. wireless

$
5,403



32.0
%Caribbean wireless


7,354



43.6Caribbean broadband


4,105



24.4Total capital expenditures

$
16,862



100.0
%Capitalized phones in Puerto Rico
    (included above in Caribbean wireless)

$
4,800Property, plant and equipment, net
    at August 31, 2006

$
632,548         
    Gross postpaid and prepaid wireless additions
    Net gain (loss)  wireless subscribers
    ARPU
    Roaming revenue
    Penetration  total wireless
    Postpaid churn  wireless
    Prepaid churn  Caribbean wireless
    Average monthly minutes of use per wireless customer
    Data revenue per average wireless subscriber
    Fiber route miles  Caribbean broadband
    Switched access lines  Caribbean broadband
    Dedicated access line equivalents  Caribbean broadband
    On-net buildings  Caribbean broadband
    Capital expenditures 25




---



##### Table of Contents



26




---



##### Table of Contents



CRITICAL
    ACCOUNTING POLICIES AND ESTIMATES
      
    it requires us to make assumptions because information was not
    available at the time or it included matters that were highly
    uncertain at the time we were making the estimate, and
    changes in the estimate or different estimates that we could
    have selected may have had a material effect on our consolidated
    financial condition or consolidated results of operations.  Allowance
    for Doubtful Accounts
    Property,
    Plant and Equipment  Depreciation
    Valuation
    of Long-Lived Assets
   27




---



##### Table of Contents



Goodwill
    and Wireless Licenses  Valuation of Goodwill and
    Indefinite-Lived Intangible Assets
  Goodwill and Other
    Intangible Assets Disclosures about Segments of
    an Enterprise and Related Information
  Income
    Taxes
  Accounting for Income Taxes
       28




---



##### Table of Contents



RESULTS
    OF OPERATIONS
  Share-Based Payment,
  Interim
    Financial Reporting Accounting for Income Taxes in Interim
    Periods  An Interpretation of APB Opinion No. 28
    Consolidated
    Operations
  Three Months EndedAugust 31,2006


2005


$ Change


% Change(In thousands, except per share data)Operating income

$
56,122


$
61,517


$
(5,395
)


(9
)%(Loss) income from continuing
    operations


(2,162
)


14,610



(16,772
)


(115
)(Loss) earnings per share from
    continuing operations:Basic and Diluted


(0.02
)


0.14



(0.16
)


(114
)     29




---



##### Table of Contents



U.S. Wireless
    Operations
  Three Months EndedAugust 31,2006


2005


$ Change


% Change(In thousands)Revenue:Service revenue

$
91,709


$
80,903


$
10,806



13
%Roaming revenue


19,322



21,225



(1,903
)


(9
)Equipment sales


9,390



5,698



3,692



65Total revenue


120,421



107,826



12,595



12Costs and expenses:Cost of services


26,332



22,884



3,448



15Cost of equipment sold


19,015



14,582



4,433



30Sales and marketing


13,220



12,605



615



5General and administrative


18,163



17,102



1,061



6Total costs and expenses


76,730



67,173



9,557



14Adjusted operating income(1)

$
43,691


$
40,653


$
3,038



7
%     (1)
    
    Adjusted operating income represents the profitability measure
    of the segment  see Note 9 to the unaudited
    condensed consolidated financial statements for a reconciliation
    of consolidated adjusted operating income to the appropriate
    GAAP measure.  Revenue.
    New When You Want It
     30




---



##### Table of Contents



Costs and expenses.
        Caribbean
    Wireless Operations
  Three Months EndedAugust 31,2006


2005


$ Change


% Change(In thousands)Revenue:Service revenue

$
86,281


$
92,132


$
(5,851
)


(6
)%Roaming revenue


1,641



346



1,295



374Equipment sales


3,356



3,322



34



1Total revenue


91,278



95,800



(4,522
)


(5
)Costs and expenses:Cost of services


17,860



16,130



1,730



11Cost of equipment sold


10,935



10,459



476



5Sales and marketing


10,634



11,172



(538
)


(5
)General and administrative


18,218



21,206



(2,988
)


(14
)Total costs and expenses


57,647



58,967



(1,320
)


(2
)Adjusted operating income(1)

$
33,631


$
36,833


$
(3,202
)


(9
)%     (1)
    
    Adjusted operating income represents the profitability measure
    of the segment  see Note 9 to the unaudited
    condensed consolidated financial statements for a reconciliation
    of consolidated adjusted operating income to the appropriate
    GAAP measure.  Revenue.
 31




---



##### Table of Contents



Costs and expenses.
       32




---



##### Table of Contents



Caribbean
    Broadband Operations
  Three Months EndedAugust 31,2006


2005


$ Change


% Change(In thousands)Revenue:Switched revenue

$
13,940


$
12,715


$
1,225



10
%Dedicated revenue


15,275



14,282



993



7Wholesale termination revenue


3,649



6,576



(2,927
)


(45
)Other revenue


2,267



3,096



(829
)


(27
)Total revenue


35,131



36,669



(1,538
)


(4
)Costs and expenses:Cost of services


10,975



13,065



(2,090
)


(16
)Cost of equipment sold


100



141



(41
)


(29
)Sales and marketing


1,735



1,773



(38
)


(2
)General and administrative


5,110



4,993



117



2Total costs and expenses


17,920



19,972



(2,052
)


(10
)Adjusted operating income(1)

$
17,211


$
16,697


$
514



3
%     (1)
    
    Adjusted operating income represents the profitability measure
    of the segment  see Note 9 to the unaudited
    condensed consolidated financial statements for a reconciliation
    of consolidated adjusted operating income to the appropriate
    GAAP measure.  Revenue.
          Costs and expenses.
 33




---



##### Table of Contents



LIQUIDITY
    AND CAPITAL RESOURCES
  Weighted
    Average Debt Outstanding and Interest Expense
  Three Months EndedAugust 31,2006


2005


Change(In millions)Weighted Average Debt Outstanding

$
2,135.4


$
1,618.8


$
516.6Weighted Average Gross Interest
    Rate(1)


9.7
%


8.6
%


1.1
%Weighted Average Gross Interest
    Rate(2)


9.3
%


8.2
%


1.1
%Gross Interest Expense(1)

$
51.75


$
34.86


$
16.89Interest Income

$
1.04


$
0.86


$
0.18Net Interest Expense

$
50.71


$
34.00


$
16.71     (1)
    
    Including amortization of debt issuance costs of
    $2.1 million and $1.6 million for the three months
    ended August 31, 2006 and 2005, respectively(2)
    
    Excluding amortization of debt issuance costs of
    $2.1 million and $1.6 million for the three months
    ended August 31, 2006 and 2005, respectively      Senior
    Secured Credit Facility
    3 4
    High-Yield
    Notes
   34




---



##### Table of Contents



1 8
  1 8
    Derivative
    Financial Instruments
           35




---



##### Table of Contents



Three Months Ended


% of Total CapitalAugust 31, 2006


ExpendituresU.S. wireless

$
5,403



32.0
%Caribbean wireless


7,354



43.6Caribbean broadband


4,105



24.4Total capital expenditures

$
16,862



100.0
%Capitalized phones in Puerto Rico
    (included above in Caribbean wireless)

$
4,800Property, plant and equipment, net
    at August 31, 2006

$
632,548               ACQUISITIONS
    AND DISPOSITIONS
   36




---



##### Table of Contents



COMMITMENTS
    AND CONTINGENCIES
           37




---



##### Table of Contents



Less ThanContractual Obligations

Total


1 Year


1  3 Years


3  5 Years


After 5 YearsLong-term debt obligations

$
2,137,863


$



$
144,463


$
550,420


$
1,442,980Operating leases obligations


243,077



26,362



46,021



34,749



135,945Purchase obligations


52,545



8,787



21,450



22,308



Total contractual cash obligations


2,433,485



35,149



211,934



607,477



1,578,925Sublessor agreements(1)


(3,098
)


(1,121
)


(1,391
)


(570
)


(16
)Net

$
2,430,387


$
34,028


$
210,543


$
606,907


$
1,578,909     (1)
    
    Represents our commitments associated with our sublessor
    agreements as of May 31, 2006.  SUBSEQUENT
    EVENT
    CAUTIONARY
    STATEMENT FOR PURPOSES OF THE SAFE HARBOR
  PROVISIONS
    OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
    1995
      
    the effects of vigorous competition in our markets, which may
    make it difficult for us to attract and retain customers and to
    grow our customer base and revenue and which may increase churn,
    which could reduce our revenue and increase our costs;
    the fact that many of our competitors are larger than we are,
    have greater financial resources than we do, are less leveraged
    than we are, have more extensive coverage areas than we do, and
    may offer less expensive and more technologically advanced
    products and services than we do;
    changes and developments in technology, including our ability to
    upgrade our networks to remain competitive and our ability to
    anticipate and react to frequent and significant technological
    changes which may render certain technologies used by us
    obsolete;
    our substantial debt obligations, including restrictive
    covenants, which place limitations on how we conduct business;
    our ability to attract subscribers in our newly launched markets
    in Grand Rapids and Lansing, Michigan;
    market prices for the products and services we offer may
    continue to decline in the future; 38




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
    the effect of changes in the level of support provided to us by
    the Universal Service Fund, or USF;
    the effects of consolidation in the telecommunications industry;
    general economic, business, political and social conditions in
    the areas in which we operate, including the effects of world
    events, terrorism, hurricanes, tornadoes, wind storms and other
    natural disasters;
    our access to the latest technology handsets in a timeframe and
    at a cost similar to our competitors;
    the effect on our business of wireless local number portability,
    which allows customers to keep their wireless phone numbers when
    switching between service providers;
    our ability to successfully deploy and deliver wireless data
    services to our customers, including next generation 3G
    technology;
    our ability to generate cash and the availability and cost of
    additional capital to fund our operations and our significant
    planned capital expenditures, including the need to refinance or
    amend existing indebtedness;
    our dependence on roaming agreements for a significant portion
    of our wireless revenue and the expected decline in roaming
    revenue over the long term;
    our dependence on roaming agreements for our ability to offer
    our wireless customers competitively priced regional and
    nationwide rate plans that include areas for which we do not own
    wireless licenses;
    our ability to attract and retain qualified personnel;
    the effects of governmental regulation of the telecommunications
    industry;
    fluctuations in currency values related to our Dominican
    Republic operations;
    our ability to acquire, and the cost of acquiring, additional
    spectrum in our markets to support growth and advanced
    technologies;
    our ability to manage, implement and monitor billing and
    operational support systems;
    the results of litigation filed or which may be filed against
    us, including litigation relating to wireless billing, using
    wireless telephones while operating an automobile or possible
    health effects of radio frequency transmission;
    the relative liquidity and corresponding volatility of our
    common stock and our ability to raise future equity
    capital; and
    the control of us retained by our majority stockholders and
    anti-takeover provisions.  Form 10-K
  ITEM 3.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   39




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##### Table of Contents



Fiscal Year Ended August 31,2007


2008


2009


2010


2011


Thereafter


Total


Fair Value(In thousands)Long-term debt:Fixed rate

$



$
(556
)

$
145,019


$
157


$
263


$
1,096,135


$
1,241,018


$
1,260,531Average fixed Interest rate


0.0
%


10.0
%


10.8
%


10.0
%


10.0
%


9.5
%


9.6
%


Variable rate

$



$



$



$
275,000


$
275,000


$
350,000


$
900,000


$
911,375Average variable Interest rate(1)


5.0
%


5.1
%


5.2
%


5.4
%


5.5
%


5.6
%


5.5
%


Interest rate swap (pay fixed,
    receive variable):Notional amount

$
450,000


$
450,000






















$
3,486Average pay rate


6.78
%


7.25
%Average receive rate


7.25
%


7.32
%     (1)
    
    Represents the average interest rate before applicable margin on
    the Senior Secured Credit Facility debt and the 2013 Holdco
    Floating Rate Notes.    ITEM 4.
    CONTROLS
    AND PROCEDURES  Rules 13a-15(e) 15d-15(e)
   40




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##### Table of Contents



PART II 
    OTHER INFORMATION  ITEM 1.
    LEGAL
    PROCEEDINGS          ITEM 1A.
    RISK
    FACTORS  Form 10-K Form 10-K
  ITEM 2.
    UNREGISTERED
    SALES OF EQUITY SECURITIES AND USE OF PROCEEDS    ITEM 3.
    DEFAULTS
    UPON SENIOR SECURITIES    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS    ITEM 5.
    OTHER
    INFORMATION   41




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##### Table of Contents



ITEM 6.
    EXHIBITS    ExhibitNo.

Description31
.1

Certification of Michael J. Small,
    Chief Executive Officer, pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.31
.2

Certification of Thomas J.
    Fitzpatrick, Chief Financial Officer, pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.32
.1

Certification of Michael J. Small,
    Chief Executive Officer, pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002.32
.2

Certification of Thomas J.
    Fitzpatrick, Chief Financial Officer, pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.  42




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##### Table of Contents



SIGNATURES
        Thomas
    J. Fitzpatrick
          Francis
    P. Hunt
       43